Expert: Student Housing Rush in Tallinn Rental Market Began Already in July, Young People Increasingly Buying Their Own Apartments

After several quieter years, Tallinn's rental market has become noticeably more active ahead of the school year, and student activity began growing already in July. At the same time, a trend is gaining momentum where parents decide to buy an apartment for their child instead of renting one, comments Helen Šank, a real estate broker at 1Partner Kinnisvara.

According to Helen Šank, the start of the school year did not bring the usual wave of students to the rental market in the last couple of years, as young people and their families kept costs under very tight control. "To save money, many students preferred to commute to school by bus from their hometown rather than rent. However, this year the situation has clearly changed – the rental market became active already in July and one- and two-room apartments are moving very quickly right now," says Šank. According to her, the average rent for a two-room apartment in a panel building in Tallinn ranges between 450–550 euros, while for a one-room apartment you should expect around 300–450 euros.

According to the 1Partner broker, one-room apartments are currently the most sought-after among students, which showed more modest interest in previous years. "In terms of locations, Kristiine is particularly popular right now, as there is good connectivity from there to Tallinn University of Technology, Tallinn University, and other schools. Many apartments are also being sought in Mustamäe and the city center. In addition to price, students pay close attention to additional costs. It's no longer enough to simply state an approximate figure for utilities, and tenants want to see even electricity and water bills if possible, so they can calculate all costs very precisely," she says.

As a new trend, this year both in Tallinn and Tartu there has been a significant increase in the trend where parents decide to buy an apartment instead of renting one. According to Šank's assessment, this is supported both by banks' more flexible lending terms and families' desire to invest in their own property. "Considering that young people come to school for three to five years, when you run the numbers, buying an apartment is definitely a more beneficial choice for the family in the long run, especially if there are several children in the family," says Šank. She gives an example that if a one-room apartment's rent costs an average of 400 euros per month in Tallinn, over three years a student's housing costs 14,400 euros and over five years already 24,000 euros. "When renting, this money simply goes into someone else's pocket, but when buying an apartment, the property remains with the family and after studies are finished it can be rented out or sold," explains Šank, according to whom when buying, the preference is primarily for simple, well-maintained 20–25 square meter one-room apartments, the prices of which usually range between 75,000–85,000 euros.